Christmas is almost here: festive lights are up, the office secret Santa underway, the last thing on most business owners' minds is their "to-do" list for the taxman. However, a little bit of holiday prep now can save you a giant headache in January.
At Cashtrak, we want you to enjoy your turkey and tinsel without worrying about your receipts. Here are our top tips for staying organised this Christmas.
Handy Tips for Limited Companies
Operating a Limited Company comes with specific rules, especially when it comes to festive generosity and year-end deadlines.
The £150 Festive Rule: Remember that you can spend up to £150 (including VAT) per head on an annual staff party. This is an allowable business expense and not a taxable benefit for your employees, provided it is an annual event open to all staff. Keep those receipts separate so they can be can categorise them correctly!
Director’s Dividends: If you are planning to take a final dividend before the end of the calendar year, ensure your meeting minutes are drafted and the dividend vouchers are issued. Limited Companies must show that there are sufficient retained profits to cover the payment.
Mind the Corporation Tax: If your year-end falls on December 31st, start gathering your mileage and final invoices now. Getting these to us early in January means we can give you a clear picture of your tax liability well in advance of the deadline.
Gift Spending: Small gifts to customers (like a bottle of wine or a hamper) are only allowable if they cost less than £50, aren't food, drink, or tobacco, and prominently feature your company’s logo. Otherwise, they are treated as "entertaining" and aren't allowable.
Handy Tips for Sole Traders
For Sole Traders, December is often the "calm before the storm" of the January 31st Self-Assessment deadline.
The January Countdown: If you haven't sent us your records for the 23/24 tax year yet, please make this your priority before the Christmas break! The earlier we have them, the more festive cheer you’ll have knowing your return is submitted and safe.
Receipt Management with Hubdoc: Christmas is a prime time for "losing" receipts in a sea of wrapping paper. Use Hubdoc to snap a photo of your business expenses (fuel, stationery, or client gifts) the moment you get them. It takes 10 seconds and ensures nothing gets missed.
Separating Personal and Business: It’s easy to accidentally use your business card for a personal Christmas shop. If you do, make a note of it immediately so we can move it to your "drawings" account rather than flagging it as a business expense.
Review Your Payments on Account: If your business income has changed significantly this year, let’s chat as soon as possible. We may be able to reduce your "payment on account" due in January, which could significantly help your cash flow over the holidays.
Wishing all our clients a very Merry Christmas and a prosperous New Year from everyone at Cashtrak!